From Learning to Knowing: A Psychological-Neurological Approach to Explain the Human Capital Formation Process

By drawing on neurological and psychological theories of learning, our study introduces a new conceptual framework to analyse the role learning plays in knowledge and skill acquisition. Learning is modelled through four mechanisms defined as individuals' participation in formal, non-formal, and informal learning, as well as learning-by-doing. Our analysis suggests heterogeneity in how various learning mechanisms affect individuals' overall stock of knowledge and skills. Additionally, the proposed analytical framework points to the existence of an optimal sequence in which different learning forms should be pursued in order to maximise overall stocks of human capital. These propositions are tested with the Adult Literacy and Life Skills Survey data (2003) utilising a variety of statistical techniques.